- BTC could see a 20% rally during the upcoming Lunar New Year, as historical trends show an 83% success rate for positive returns during this festive period.
- Pro-crypto developments in the U.S. and optimism around Bitcoin’s strategic potential further strengthen market confidence, setting the stage for a potential breakout to $120,000.
Bitcoin, the world’s leading cryptocurrency, has been on investors’ radars recently, recording a notable 3% gain today. Amid rising optimism, a new report by Matrixport highlights the potential for BTC to rally by 20% during the upcoming Lunar New Year, drawing insights from historical trends.
Why BTC Could Rally This Chinese New Year
The Lunar New Year has consistently been a bullish season for Bitcoin. Over the past 12 years, Bitcoin has delivered positive returns during this festive period 83% of the time, according to Matrixport. This seasonal pattern is attributed to increased trading activity during the holiday, as families and investors exchange gifts and funds, often turning to cryptocurrencies like Bitcoin.
China’s influence in Bitcoin’s early days also plays a role in this trend. By 2014, the country controlled nearly 70% of global Bitcoin trading, driven by strict capital controls, speculative investments, and large-scale mining operations. The Chinese tech sector further boosted Bitcoin’s ecosystem by manufacturing mining rigs and expanding the global network of validation nodes.
Matrixport analysts note that the Lunar New Year amplifies Bitcoin’s network effect, as more people buy and learn about the cryptocurrency during this period, creating a surge in demand.
Bitcoin’s price dynamics are influenced by a combination of technical indicators, macroeconomic factors, and global trends. On the technical front, Bitcoin is navigating conflicting signals, with oversold conditions suggesting potential support and overbought weekly metrics indicating resistance.
Additionally, Trump’s focus on positioning the U.S. as a global crypto leader has further strengthened market confidence. His recent executive order to establish a national digital asset stockpile underscores his commitment to fostering the crypto industry.
Can BTC Rally 20% This Lunar New Year?
Historically, the Lunar New Year has been a catalyst for Bitcoin’s growth. In 2022 and 2023, BTC saw gains of 26% and 23%, respectively, during this period. Matrixport identifies the 20 days surrounding the holiday as the “most favorable window” for Bitcoin, making it an attractive period for traders seeking long positions.
While concerns over reports of China selling BTC holdings have tempered some optimism, the broader market sentiment remains positive. Bitcoin’s recent rally to $105,489, coupled with a trading volume surge of 65% to $99 billion, signals robust market activity.
As the Lunar New Year approaches, Bitcoin’s upward momentum shows promise. Analysts predict the potential for BTC to climb to $120,000, reflecting strong confidence among market participants. With the Relative Strength Index at 61, indicating a strong uptrend, the stage is set for a potential breakout.
If historical patterns hold, this Lunar New Year could bring another 20% rally for Bitcoin, reaffirming its reputation as a seasonal outperformer.